Merck KGaA set to buy Serono for $13.5 billion

Merck KGaA has bought a 64.5 per cent majority stake in Serono, the Swiss pharmaceutical company, and has stated its intention to complete the purchase of all Serono shares, in a deal that could reach $13.5 billion (7.1 billion pounds).

The Bertarelli family, which owned the majority stake in Serono, sold up after Merck KGaA offered 1,100 Swiss francs (466 pounds) per share. Serono has previously been the subject of an eventually withdrawn bid from GlaxoSmithKline, while Novartis was also thought to have been interested.

Merck KGaA will merge its own pharmaceutical division with Serono to create Merck-Serono Biopharmaceuticals, described by Michael Roemer, chief executive officer of Merck KGaA, as a “perfect fit”.

Analysts have expressed surprise over the merger, as Serono had recently talked of being an acquisitive company, rather than being one available for acquisition.

Tilman Dumrese, senior analyst of healthcare at Sal Oppenheim, told Reuters news agency: “Keeping in mind that Bertarelli announced an acquisition strategy and that assigned Serono the role as predator planning acquisitions, today’s news is a complete surprise to the market.”

The combined company would become one of Europe’s biggest drug companies, with drugs like Serono’s Rebif and Merck’s Erbitux proving to be strong sellers.

Serono claims that Rebif is the leading product outside the US for the treatment of multiple sclerosis, while the company also provides a completely recombinant gonadotropin portfolio.

In June, the Swiss company was strongly linked with a buyout for Shire, the UK’s third-largest pharmaceutical company. Furthermore, the company has a number of alliances and agreements with other companies, including AstraZeneca, Amgen, Pfizer and Genentech.

Merck KGaA had previously been unsuccessful in acquiring Schering AG, which was bought by Bayer.